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Big Six Energy Bosses Called Before MPs

The Energy and Climate Change Committee has called the heads of the UK’s biggest six commercial energy firms before MPs today to give evidence to support the recent spate of prices rises across the industry.

Sir Robert Smith, Chairman of the committee of MPs, has called upon bosses of the ‘big six’ to Parliament after three of the energy firms announced price rises of up to 10.4% in recent weeks. SSE, Npower and British Gas are all set to raise prices on household energy bills as soon as the 15th of November, with analysts – and, indeed suggestions from the rest of the Big Six as well – that the other three major energy merchants will join them not too far into 2014.

Sir Robert Smith, said: “The committee has today decided to call in the energy bosses in the context of the latest wave of price increases.”

Requesting the presence of bosses of the Big Six to provide “reasons and justification” before the committee at the session on October 29th would help MPs examine and understand the differences in pricing between the companies as well as how “the transparency of energy company profits can be improved”.

It’s likely that the commercial energy giants will point a good portion of the blame back at the government, after Centrica – owners of SSE and British Gas – pushed back on the Energy Companies Obligation (ECO) earlier this month claiming it was placing too much of a strain on suppliers to make Britain’s ageing housing stock more energy efficient.

Combined with the higher wholesale energy costs and more expensive delivery methods and there could well be little MPs can do to put pressure on energy companies to stabilise their prices and follow the levies required to fun environmental initiatives.

The investigation by the committee could be seen as something of a smokescreen by the Coalition Government, however, following large public backlash and increased political debate on energy prices.

Recently, Labour leader Ed Milliband pledged a price freeze for 20 months if his party win the 2015 General Election – so, being seen to take a proactive stance on energy prices will likely do little to harm the Prime Minister David Cameron’s reputation.

Domestic Energy Price Increase so far

SSE’s price hike will see an average increase of 8.2%, three times the rate of inflation, affecting 4.4 million household electricity customers and 2.9 million gas users. It has around 9.5 million customer accounts, many of which are on fixed-price tariffs.

British Gas is to raise its electricity prices by 10.4 per cent and its gas prices by 8.4 per cent from 23rd November, meaning that bills for almost eight million customers will jump by £125 a year to an average of more than £1,400.

The Npower increase includes an electricity price rise of 9.3% and a gas price rise of 11.1%. The move will affect 3.1 million customers.

Scottish Power has announced a price rise of 8.6% for dual-fuel energy bills from the 6th December. The company said it would increase gas prices by 8.5% and electricity prices by 9%. The price rise would lead to a £113 increase in the average annual dual-fuel bill to £1,424 and will affect about 2.2 million Scottish Power customers.

Energy analysts have warned consumers there is “nowhere to hide” from price rises after npower became the latest company to announce a price increase this week.